The Proven Construction Sales Process For Custom Home Builders

Are you struggling to convert leads into clients? Are you wasting time with prospects that aren't right for you?

You're not alone. Residential construction is a competitive industry, and there are lots of price shoppers out there looking for the cheapest builder.

To win the type of projects you love working on at the margins you deserve to earn requires a strategic and systematic approach to sales.

But with long sales cycles and numerous stakeholders involved in a decision to build, the construction sales process is layered with fail points.

To help you out, we’ve packaged up our best sales tips for builders in this article.

If you want to develop a repeatable sales process based on a proven methodology used by APB members to close thousands of high margin building contracts, then keep reading.

The Construction Sales Process at a Glance

The sales process for builders involves several stages, each aiming to build trust and demonstrate value so that when you ask for the sale, it's a no-brainer!

1. Qualification

To avoid wasting your time with unsuitable prospects, you need to ask a series of closed questions that will allow you to determine the prospect's eligibility.

Qualifying prospects is a critical stage in the sales process, as it only takes 5 minutes, but it could save you hours of wasted energy chasing up and talking with people who will never sign a building contract.

Bonus tip: Make detailed notes of your qualifying call and record them in your CRM so you can refer back to them later in the sales process.

2. Discovery

In this step, you'll uncover what the prospect wants. All their fears, dreams, and desires about building a house. You’ll gather vital insights that you can play back to them later in the sales process, showing that you truly understand their needs.  

To ensure you have a lasting impact on a prospect at this stage, ask open-ended questions to create a conversation and dig deeper into the emotional reasons behind their build.

The goal at the end of this discovery call is to schedule a face-to-face meeting with the prospect.

Bonus tip: Always consider the next step the prospect should take to progress the sale.

3. Face-to-Face Meeting

There may be some time between when you schedule the meeting and when you have it. So call the prospect to remind them, confirm attendance, and ensure they have everything they need for the meeting. This call re-engages their interest and gets them excited about the thought of building with you.

You should also have a well thought out staging plan for this meeting, complete with an agenda, questions you are going to ask, and things that you will go through so that you have the best first impression possible.

The purpose of the meeting is to get a deeper sense of what the prospect is looking for and what’s important to them. Ask good questions, provide information, build a strong relationship, and strengthen your credibility.

Show the prospect some relevant past designs you have built and gather critical preferences by asking what they like and what they don't.

The goal of this meeting is to sign them up for a Concept Design Agreement. You've built value all the way along, now it's time to charge for your time and expertise.

4. Concept Design Agreement

This stage is pivotal. It’s the very first thing that clients will purchase from you. 
You want to package the Concept Design Agreement up as a product on its own. It has features, functions and benefits, and of course, it has a price tag.

If you package up the Concept Design Agreement like a product and explain the deliverables, then the value should be apparent to the right prospect, and paying for it shouldn’t be an issue.

You might provide them with some simple elevations, a basic floor plan, and maybe a rendering. But you certainly want to include an estimate that should be within 10% of what the actual contract value will end up being, given the scope of work you’ve discussed to this point.

Bonus tip: We recommend including how you will ensure that the design sticks to the prospect's budget, the exact process you'll follow, and the deliverables they'll receive.

5. Preliminary Building Agreement

Don't go straight from concept to contract. This would be a big jump in price from what might be a couple of thousand dollars to something worth hundreds of thousands or millions of dollars.

That’s why we recommend creating a prelim first.

What should a Preliminary Building Agreement include? Some common items included in a prelim are engineering, detailed drawings, soil testing and all of those important preconstruction details. You might even include the selection process for a designer.

There should also be an accurate quote.

This might take you 20, 30, or 40 hours to create, so you need to charge for it. It's not unusual for builders to charge thousands or even tens of thousands for a Preliminary Building Agreement. When you consider how much an engineer or architect will charge for their services, this is minimal in comparison.

6. Fixed Price Contract Presentation

The price shouldn't be a surprise at the contract stage, so you should lead with that. Then, follow with all of the value that you will bring to the table. Press those emotional buttons you've uncovered in the discovery call and throughout the sales process.

Whatever you do, don’t send this by email! It should be a face-to-face meeting in person or via Zoom where you can deliver a well-prepared presentation and handle any objections on the spot.

We recommend only trying to convert 50% of your Preliminary Building Agreements into contracts, because you only want to take the very best options at this stage.

Why? Because you need to control supply and demand. If you create more demand than you have supply you can stay in control of your sales funnel and become overbooked. This is how builders have work lined up for over a year in advance.

7. Construction Slots

Construction slots are essentially your future start dates for projects. Creating scarcity with limited construction slots each year is one way to build up more demand than supply.

When you present the fixed price contract to the client in the meeting, you're looking to book a start date. You want people who – and this is very important – A, will be willing to wait for you, if necessary, because you've demonstrated your value through this process. And then B, are willing to pay a premium for you and your building company.

Clients must understand that signing a contract doesn't mean immediate construction; it depends on your schedule and slot availability.

Principles of Successful Construction Sales

Successful sales in residential construction has three fundamental principles: gaining a deep understanding of your customer's needs, having the confidence to stand your ground and walk away from clients who don't align with your values or qualification criteria, and maintaining clear communication at every stage.

By applying these principles, you'll not only attract the right clients but also build strong, lasting relationships that benefit both you and your customers on the journey of building their dream homes.

Want to learn how to win more contracts at higher margins and avoid having to build for problem clients? Get the Sales Blueprint for Builders for FREE below.